Five Middle East conclusions from Arthur D. Little’s Global Automotive study

Arthur D. Little has released the 2024 edition of its annual Global Automotive study, shedding light on current and future trends in the industry. A round-up of the report’s key findings from a Middle East perspective.

Car Ownership and Driving Patterns

Middle East respondents exhibit a strong preference for car ownership over public transportation. The study reveals that residents in the Middle East have longer commutes and higher annual mileage compared to their European counterparts. On average Middle East residents commute 32 km daily which is 50% higher than Europe, and drive 18,000 km annually, 38% more than Europe.

Source: Arthur D. Little

Shift to Electric Vehicles

While the majority of respondents currently own internal combustion engine vehicles, there is significant interest in transitioning to electric drivetrains for future car purchases, specifically plug-in hybrid electric vehicles and pure battery electric vehicles. Many potential buyers are driven by factors such as lower total cost of ownership, environmental benefits, and concerns about climate change.

However, challenges such as limited range, high up-front costs, and poor charging infrastructure remain.

Source: Arthur D. Little

Emerging Mobility Trends

Ride-hailing services such as Uber and Careem are a popular new mobility option among Middle East residents, tried by 56% of respondents, with higher usage rates than for traditional car sharing and ride sharing, and especially higher than those in Europe (28%), and the USA (50%).

The study indicates that Middle East residents are inclined to consider new mobility services, with an average of around 15 journeys made using new mobility services monthly, higher than Europe and the United States.

Source: Arthur D. Little

Autonomous Vehicles

Middle East consumers exhibit a notably higher acceptance of autonomous vehicles compared to respondents in Europe, North East Asia, and the US with markets like Saudi Arabia exhibiting 3 times higher acceptance than Europe, and UAE exhibiting twice as high as mature markets.

Safety concerns, including risks associated with both human and machine errors, remain the primary obstacles to broader adoption.

Source: Arthur D. Little

Car Purchasing Behavior

The internet has emerged as a primary channel for Middle East residents in the car buying process, encompassing everything from vehicle research to arranging test drives and finalizing purchases. Despite their strong inclination to buy cars online –among the highest globally with upwards of 53% – Middle East consumers still frequent dealerships, averaging 3.3 visits per purchase, which is also one of the highest rates worldwide.

Source: Arthur D. Little

Commenting on the report’s findings, Alan Martinovich, Partner and Head of the Automotive practice in the Middle East and India at Arthur D. Little, said: “The Middle East region is at the forefront of embracing the future of mobility. Our findings highlight a significant readiness to transition to electric vehicles, a favorable attitude towards autonomous driving technologies, and a strong inclination towards digital transactions in car purchases.”

“Our study highlights the promising market opportunities for car manufacturers (OEMs) and distributors in the Middle East,” added commented Rich Parkin, Partner in the Automotive practice and lead author of the study. “Consumers in the region show a growing interest in car ownership and have high expectations for the latest vehicle technologies and a digital as well as physical buying experiences.”

“To meet the changing preferences of Middle Eastern customers, car manufacturers (OEMs) and distributors need to effectively combine physical and digital experiences.”

For its study, Arthur D. Little surveyed over 16,000 respondents across 25 countries, including in the Middle East.

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